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How today's economy works

Some of you might be familiar with these things, for those who aren't, this animation explains it very nice

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So, we see that in the Fractional Reserve Banking System a certain deposit can be loaned out approximately 44 times before it reduces to an amount which is 1% of the Initial Deposit.

How much money is created in the process?

Now, based on the Fractional Reserve Banking System, the Banks do not deduct the amount loaned out from its accounts (if it did then the banks wouldnt have created any money at all). So in every such step money is virtually created out of thin air which in turn inflates the amount of money initially deposited.

Note: Of course, they do not really pay out loans from the money they
Receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the Borrowers' transaction accounts (MODERN MONEY MECHANICS, pg  7)

Lets check out the dynamics of the money creation process:-

In the 1st step the amount of money in the economy = 1000$

In the 2nd step the amount of money in the economy = 1000$ + 0.9 x 1000$ = 1900$

In the 3rd step the amount of money in the economy = 1000$ + 0.9 x 1000$ + 0.9^2 x 1000 = 2710$ and so on .

So we see that FOR EVERY DEPOSIT IN THIS SYSTEM 9 TIMES ITS VALUE CAN BE CREATED OUT OF THIN AIR.

Now regarding the application of INTEREST and to completely understand the FRAUDULANT nature of this whole system lets start a mental exercise considering the amount which has to be paid back in order to clear all the loans in a single chain of alternate lending and borrowing.

THE MONEY INFILTRATES IN THE ECONOMY AS BELOW:-
(D) 9.70$ (1% of D)729$ 810$ 900$1000$

Whose Nth term is given by = 1000 x 0.9^ (N  1)
= D x 0.9^ (N  1)

Now, had there been no interest then the money would have retraced its path destroying the virtual money in every step, as follows:-

Note: Though it seems that a deposit of 1000$ will create a deficit of only 20$ (2%) in the system but that is not the case. In fact, the deficit in each step of the above example will add up because there is no possibility of it being fulfilled from the very beginning of the contraction process.

Therefore the percentage of defaulters /debtors/slaves generated by the system due to an interest rate of 2%
= [36 / (2^9  1)] x 100 = 7% (leaving aside the 50% who did not even receive any money in the first place)

So we can well understand that in order to make up for this deficit the next injection of money will have to be of a higher magnitude than before but that again will create more debt in the system. So its a vicious cycle which perpetuates itself and constantly enhances differences and thereby concentrates the money/wealth/resources to the dwellers on the top level of the money chain. Its like a pumping mechanism which constantly drains out wealth from the lower rungs to the upper rungs of the money chain.

The banks of our world are not there to distribute wealth it is there to increase differences and to concentrate all the money/wealth/resources into the hands of a very few on the top of the money chain.

Now considering the present world population
= 7 billions (App.)

Or 2^n - 1 = 7 x 10^9

Or n = 32.70 = 32 (App.)

Considering R = 10% (which is common for most transactions as documented in Modern Money Mechanics, p-7)

Now we have seen earlier that the distribution of the money in this system can never be uniform. It slowly decays in magnitude as we drift downwards in the money chain.
So what is the amount of money possessed by the terminal person that is the person on the top of the chain?
We can easily visualize that it is 10% of the amount injected in the system i.e. 102.3$ say 100$.

So you can well understand that if the total money in the world were to add up to 7 billion$ which is just equal to the population i.e. 7 billion, then for every 100$ that you possessed, there would be a story of 512 people who didnt get any money because of you and 32 more who is going to get robbed of everything just because of you!!

What if you were a millionaire?

That means (1000000/100) x (512 +32) x q = 5.44q Million people would be suffering for you!
And a billionaire?

That means 5440000000q = 5.44q Billion people enslaved and in poverty just because of you.

So how much personal wealth will be required to enslave the whole world?
= (7/ 5.44) k Billion $
Where k = Money / population Ratio.
= Total base money in the economy / Total Population.
And q = (1/k) i.e reciprocal of k

By now we know that an injection of M$ in the economy creates a debt deficit of
= MR/100 x ((1  F ^n) / (1- F))
Where F = Excess reserve factor = 0.9 for a reserve requirement of 10%.